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Harley-Davidson beats profit estimates as Trump weighs in

Motorcycle maker previously signalled concern over European tariffs

Tue, Apr 23, 2019, 13:38

Harley-Davidson’s overall net income fell 26.7 per cent to $127.9 million in the quarter. Photograph: Kim Kyung-Hoon/Reuters

Harley-Davidson on Tuesday beat expectations for first-quarter profit and stuck to its full-year shipment forecasts in the face of concerns over falling US sales and European import tariffs, sending its shares up 3 per cent.

President Donald Trump, who has criticised Harley for its plans to shift some US production overseas, weighed in after the results to say EU tariffs on the manufacturer were “unfair” and vowed to reciprocate, without giving details.

Harley, while again weighed down by a continuing decline in its popularity both in the United States and globally, topped Wall Street’s profit forecasts by more than 30 cents per share.

Earlier this year, Harley said the retaliatory import duties imposed by the European Union on its bikes would cost the company between $100 million (€89 million) and $120 million (€107 million) in 2019.

Import duty

European markets are a growing portion of the Harley’s total motorcycle sales. To avoid the additional import duty, it has boosted investment at its Thailand plant to serve that market.

It said US retail motorcycle sales, or sales by dealers to customers, fell 4.2 per cent in the first quarter ended March 31st. European sales were down 2.1 per cent.

The company’s overall net income fell 26.7 per cent to $127.9 million (€114 million) in the quarter, while revenue from motorcycles and related products fell 12.3 per cent to $1.19 billion (€1 billion), roughly in line with forecasts.

That generated earnings per share excluding items of 98 cents, compared with the average analyst estimate of 65 cents per share, according to data from Refinitiv.